Forest loss has significantly affected the ecology and economies of rural communities. In response, forest landscape restoration (FLR) has attracted scientific and political attention in recent decades. However, insufficient context-specific empirical evidence exists on the interplay between rural livelihoods and participation in FLR, especially in rural Ghana. To address the lacuna, we used the socio-ecological co-evolution model and the sustainable livelihood framework analytical lenses to investigate the relationship between livelihood activities and community participation in FLR, and the effects of FLR on local livelihoods in the Offinso Forest District of Ghana. Data for the study were obtained using 145 structured household surveys and 10 Key Informant Interviews. Our analyses revealed that rural people in the Offinso Forest District of Ghana participate more in agroforestry (modified taungya system) than in other FLR activities. Additionally, participation is significantly associated with age and education level. Younger adults (18–35 years old) and/or well-educated individuals tend to engage less in FLR activities than their counterparts. Moreover, individuals who collect fuelwood, collect fodder/keep livestock, hunt, and produce charcoal participate more in FLR activities. Surprisingly, individuals whose livelihoods are not directly linked to the forest, such as those involved in trading, palm oil processing, corn milling, beekeeping, and fashion, participate more in FLR activities. Finally, FLR activities significantly enhanced the natural capital of individuals, followed by social capital, and then financial capital, reiterating the multifaceted benefits of FLR when well-executed. Future research should investigate the institutional factors that shape FLR participation and its impact on livelihoods.